“I think what we should be trying to do is find good design within small apartments,” says James Tutton, the director of Melbourne-based property developer Neometro, when asked about the Victorian government’s discussion paper on apartment standards. “When I say small, I’m talking 64 or 54 sqm two bedroom apartments,” says Tutton, whose firm currently has five projects on the go, ranging in size from 45 apartments up to 150.
“My view would be that there’s a midway point between some of the things that are being advocated for from the design community, and then a reasonable outcome in terms of guidelines,” says Tutton. “A lot of developers are guilty of creating absolute rubbish and pay very little heed to the wellbeing of the people who have to live in those apartments, and that’s a very negative thing, but at the same time, I think there’s also a volume of voices coming out pushing for design guidelines without understanding the economics of what they’re proposing.”
Tutton doesn’t believe we should have minimum size requirements because generally, the cost of a new apartment is $10,000 per sqm. “If we have requirements that a two-bedroom apartment must be a minimum of 70 sqm, that’s a cost of $700,000. Extrapolate that to the average Australian income and it’s a massive problem,” he said. “On top of that there’s a double whammy from a social perspective because in terms of building near existing infrastructure, medium density apartments are the best way to do it.”
“Probably the greatest thing missing from the discussion sometimes is the economic side of it. It’s also an issue of affordability. Affordability is not only impacted by the size of the apartment, it’s also impacted by other attributes of the guidelines in terms of natural light and outdoor space which means that the gross floor area you get onto a piece of land is going to be smaller, therefore the ability to divide that land area means you get less apartments on it, which in turn means that needs to be added to the price of apartments.
“So you end up with an issue whereby yes, you’ve got better apartments but they are more expensive, and that in itself is a significant social problem. The other end of the spectrum is that building apartments that have poor natural light, that have poor acoustics, that are not protected from fumes, that are not near infrastructure, require people to drive their cars when there’s no proper road infrastructure have massive consequences from a physical and natural health perspective, so that’s also very negative.
“I think what we need to find is a midway point between guidelines which protect society from apartments being built which are inherently bad for the wellbeing of society, and then protect on the affordability side as well.”
Tutton believes that without government-imposed guidelines, the market is responding to bad design in terms of buyers becoming more knowledgable, and therefore shying away from lower quality design. “Ideally that’s probably not happening at the pace at which it should happen, and I guess the problem is the fact that once buildings are built, they’re there for 150 years,” he said.
Neometro is currently doing due diligence on a bunch of projects, all of them off market. “Ideally we’d acquire three more sites this year, but as is well documented, competition for sites is very substantial so finding new sites is not easy at all,” says Tutton.
Victoria is different to WA – I just wish that when all the apartments were built back in the old days 1979 and earlier that they built storage for the apartments and most important one car bay. I know in Melbourne it’s just a premium to get a car bay. Perth is probably 10 years behind but parking is definitely an advantage. New units are generally out of the reach of our first home buyers.